NetOutlet is an online outlet store with an innovative discount model based on customers buying in groups with their friends. Provides a solution that is attractive for both consumers and ret

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NetOutlet in a Nutshell

NetOutlet is an online outlet store that combines traditional e-commerce with an innovative discount model based on customers buying in groups with their friends. By combining elements from social shopping with those from deal sites, NetOutlet provides a solution that is attractive for both consumers and retailers. The business and partnership model has attracted the interest of several leading Nordic retailers and B2C service providers in industries such as travel, entertainment, electronics, specialized consumer products and software as a service.

Background

E-commerce, worth some US$680bn globally, is one of the fastest growing industries and is expected to grow at some 10%-20% p.a. over the coming years. In Finland, e-commerce has grown to an estimated €10bn, with some 75% of people having made a purchase online. At the same time, the economic downturn has decreased people’s disposable income and has made shoppers more price aware than ever before. The last few years have seen the rise of social media and a new trend in e-commerce called social shopping. Social shopping uses social media and other interactions to add a social element to online shopping. These include products reviews, chat interfaces and webcam feeds. Only a handful of companies, however, have introduced true incentives for customers to interact with their peers. The companies that have done this, such as GroupOn and other deal sites, have achieved rapid growth. NetOutlet aims to take the best of both of these models and introduce an e-commerce solution with an innovative discount model based on customers buying in groups with their friends.

Brief Business Overview

NetOutlet is an online outlet store that offers a wide variety of products and services. The store will combine traditional social shopping elements, such as product reviews and recommendations, with an attractive discount structure that incentivizes customers to purchase in groups with their friends. With NetOutlet, shoppers are encouraged to connect with their friends by increasing the discount for each friend who also purchases the same product. NetOutlet is heavily integrated with Facebook, with the Facebook Connect API creating the user base for the store and identifying which customers are friends. Customers can also display their purchase or intention to purchase a certain product on their Facebook wall and thereby attract other friends to join them.

Rather than having its own inventory of products, NetOutlet works together with existing retailers to offer their range of products and services. The shipping is also handled by the retailer and NetOutlet only acts as an intermediary in the payment process. To its suppliers, NetOutlet offers an additional sales channel and a new avenue for growing their business, as well as functioning as a marketing tool, which can increase suppliers’ brand recognition and potentially drive traffic to their own website.

Products and Services

NetOutlet aims to offer a wide variety of products and services from trusted and well-known brands. The assortment consists primarily of excess inventory, last year’s models (e.g. home electronics), and seasonal products (e.g. sports equipment), as well as services with a low marginal cost, such as event tickets (e.g. concerts and sports events), package travel and software as a service. The business and partnership model has attracted the interest of several leading Nordic retailers and B2C service providers.

Revenue Model and Financial Projections

NetOutlet acts as an intermediary between consumers and retailers and its main source of revenue stems from charging the retailer a commission per product sold. The commission correlates with the value of the product, with higher value products generating greater revenue. Additional revenue streams can also be captured once the business becomes more established. These include retailer subscription fees, special promotion fees, as well as advertising revenue.

Note: Financial projections have been removed after the completion of financing.

Growing up in Finland but having lived in London for 11 years, I have in international background and a global perspective on everything I do. Given my professional background, my main skills lie in analysis, business development and strategy, as well as project management.

After graduating from university, I entered the world of investment banking in 2005. I was attracted to several features of the industry; not only did it allow me to gain insight into large public companies and their strategy, it was, more importantly, a challenge. After working for a few years in London, I felt it was time to move back to Finland. I moved to a relatively small M&A boutique in Helsinki, where I became Partner after a few years. In a small company, dealing with smaller clients, I got a much better insight into how companies operated and what made companies successful (and what didn’t).

While the advisory work was interesting, I always wanted to get involved in the operative side of our clients’ businesses. As we developed and refined the concept for NetOutlet together with Robert, I realized that this was my chance to put all the skills I had developed to use and to make my mark on something big. Robert and I are both ambitious and committed, and have what it takes to make NetOutlet a success story!

When I’m not developing the greatest start-up ever, I like to play sports like golf, tennis and ice hockey. Music is also a big passion of mine, and I play guitar and bass in a band with some friends.

I was born in Finland, grew up in France, lived in England for a while, and studied economics in Finland with a term abroad in Taiwan. I have always seen myself as the social nerd, and my main skill set lies in engagement and sales, which is what I have been doing throughout my business life. During and after my studies, I have worked in both B2C and B2B sales and sales reporting, in both local and multi-national corporations. I am a people person and sales has always been something I enjoy. I believe a sales person has two ears and one mouth, and, as such, should listen twice as much as they talk. That is the essence of sales – understanding client needs and fulfilling them. It's not about empty promises; it's about service delivery and coming through for your clients.

My nerdy side came to call when I took the job as Head of Sales at a web development firm called Developer's Helsinki. Combining project management, sales and IT was a great fit for me and it was during this time that I got the idea for NetOutlet. Talking about it with Jerker and refining the idea was very satisfying and when we started to generate interest and get results, I knew this was what I always wanted to do. Developing a start-up business is about ups and downs, giving 110% and working at it until you get it right. There’s something very special about it being your company, your goals and your targets.

I try to live by the mantra work hard, play hard, and in my free time I play in a band, try to get in as much diving as possible and try new things like skydiving, sandboarding and even golf, but I also spend time playing games and reading. I am a huge fantasy fan and have devoured the "A Song of Ice and Fire" series (A Game of Thrones) and I recently spent a good part of my Saturday hammering through the Diablo 3 beta.

I would say it takes a good idea and great drive and perseverance to build your own company. NetOutlet is our good idea and together with Jerker, we have the drive and determination as well as the skill set needed to see it through!